Sirius Minerals has persuaded owners of $64m of convertible bonds to convert their holdings into shares, which the company said was more than offset by the release of cash and reduction in interest payments.
The move, which will save the FTSE 250 potash miner $27.1m in interest payments, will result in 218.1m new shares issued as a result of the conversions. Sirius will also immediately receive $5.4m cash, being the interest payments that would have been paid with respect to those bonds in their third-year, which has been held in escrow.
For each $200,000 bond, 650,195 'base' shares will be issued, plus 10,237 'premium to parity' shares and 23,310 'incentive shares'.
Following the conversion, Sirius will have 4,689.5bn shares in issue and $244.2m of convertible bonds that remain outstanding of the $400m originally issued in 2016.
Finance director Thomas Staley said he was pleased with the level of participation in the tender process. “The total cost of incentivising conversion through the issue of shares was more than offset by the release of escrowed cash and removal of the need to pay interest payments beyond year two.
“This has enabled us to facilitate an orderly conversion for bondholders and optimise our capital structure ahead of stage two financing later this year.”
Directors had also planned the tender offer as they looked to reduce outstanding debt ahead of the 'stage 2' financing of the company's Woodsmith polyhalite mine in North Yorkshire planned for later this year.
Sirius said last month that it was making progress with the mine and was intending is to begin talks with potential lenders over the coming weeks, with the reiterated aim of having commitments in place during the second half of 2018.